How many of you have ever been to one of those Payday Loan places?
I have, and it’s not good. Even the energy and feeling you get when you walk in is pretty grim.
I took out a payday loan a few years back – nothing major, $600 was all. We were going to Disneyland and I didn’t get paid until the day we got back, so it was just a means to get a small advance. The 391% Annual Interest rate didn’t bother me because it was only for a week and a half – no big deal.
When we got back, of course other things came up, and I only paid some of the loan back. My next payday again left me unable to pay all the bills and pay off the loan, so I paid the minimum again. To make a long story short, by the time I had the loan paid off, I’d paid the lender back nearly $5,000 for a $600 loan, and my story is not unique.
I’ve known several people that every payday means a trip to the Payday Loan place to pay the interest and extend the loan, never even having a prayer of paying anything towards the principle and paying off the loan. In my opinion, it’s a predatory business that caters to the people least able to survive financially.
In May of this year, Ohio passed H.B. 545, capping the annual percentage rate at 28%, extending the repayment period to 31 days instead of 14 and making the maximum loan amount $500, down from $800.
I’m generally not a fan of government oversight and/or regulation, but I also beleive that in some instances regulation is necessary. Utah may want to consider something along these lines.
January 17th, 2009 at 10:57 pm
Dude, Amen. Another one to consider removing altogether is state lotteries. It totally preys on the poorest and stupidest of society. And the sad thing is that it’s government-run.